The phrase,'Unsound Transit', was coined by the Wall Street Journal to describe Seattle where,"Light Rail Madness eats billions that could otherwise be devoted to truly efficient transportation technologies." The Puget Sound's traffic congestion is a growing cancer on the region's prosperity. This website, captures news and expert opinion about ways to address the crisis. This is not a blog, but a knowledge base, which collects the best articles and presents them in a searchable format. My goal is to arm residents with knowledge so they can champion fact-based, rather than emotional, solutions.

Transportation

Monday, July 9, 2007

Oregon, a model of 21st-century urban planning,the region’s integrated land-use and transporta-tion plans have greatly reduced the area’s livabili-ty. To halt urban sprawl and reduce people’s dependence on the automobile, Portland’s plans use an urban-growth boundary to greatly increase the area’s population density, spend most of the region’s transportation funds on various rail tran-sit projects, and promote construction of scores of high-density, mixed-use developments. When judged by the results rather than the intentions, the costs of Portland’s planning far outweigh the benefits. Planners made housing unaffordable to force more people to live in multi-family housing or in homes on tiny lots. They allowed congestion to increase to near-gridlock lev-els to force more people to ride the region’s expen-sive rail transit lines. They diverted billions of dol-lars of taxes from schools, fire, public health, and other essential services to subsidize the construc-tion of transit and high-density housing projects. Those high costs have not produced the utopia planners promised. Far from curbing sprawl, high housing prices led tens of thousands of families to

outside the region’s authority. Far from reducingdriving, rail transit has actually reduced the share of travel using transit from what it was in 1980. And developers have found that so-called transit-oriented developments only work when they include plenty of parking.Portland-area residents have expressed their opposition to these plans by voting against light rail and density and voting for a property-rights measure that allows landowners to claim either compensation or waivers for land-use rules passed since they purchased their property. Opposition turned to anger when a 2004 scandal revealed that an insider network known as the “light-rail mafia” had manipulated the planning process to direct rail construction contracts and urban-renewal subsidies to themselves. These problems are all the predictable result of a process that gives a few people enormous power over an entire urban area. Portland should dismantle its planning programs, and other cities that want to maintain their livability would do well to study Portland as an example of how not to plan.

IntroductionThe city of Portland, Oregon, has received enormous publicity in recent years for its land-use and transportation planning. The New York Times calls Portland “the city that loves mass transit.”1 Portland is “successfully getting people out of their cars,” says the BBC.2 From all over the country, city planners, elected officials, and reporters travel to Portland to examine the region’s urban-growth bound-ary, rail transit system, and transit-oriented developments. “It sometimes seems as if the whole country is looking to Portland as a role model for 21st-century urban development,” says Governing magazine.3 Portland’s plans have won numerous awards from the American Planning Association, and Congress happily gives the city more than its share of federal tran-sit dollars to fund expansion of the region’s light-rail system.Residents of the Portland area are not as enthusiastic about the region’s planning process. Recent elections reveal that most cit-izens are upset by the unaffordable housing, traffic congestion, increasing taxes, declining urban services, and disappearing jobs that have resulted from the plans.In 1995, the city council adopted the slo-gan, “The City That Works.”4 No one on the council felt any sense of irony that Portland was borrowing a slogan first applied to Chicago by Mayor Richard J. Daley. Daley, of course, was famous for using a political machine of patronage and pork to get himself reelected five times. Since few Portland may-ors remain in office for more than two terms, no one imagined in 1995 that the Northwest city was also run by a machine.The head of that machine, Neil Goldschmidt, had been mayor of Portland in the 1970s. President Carter appointed him Secretary of Transportation in 1979, and in the late 1980s Goldschmidt served as gover-nor of Oregon. In 1991 he left public office and started a political consulting firm that used his federal, state, and local contacts to promote seemingly idealistic schemes that

quietly diverted billions of dollars in publicfunds to Goldschmidt’s clients and cronies.Known to insiders as the “light-rail mafia,” Goldschmidt’s machine suffered a huge set-back in 2004 when the public learned that,while mayor, Goldschmidt had a three-year sexual relationship with a teenage girl starting when she was just 14. The former mayor disap-peared from view, leaving his allies to fend for themselves. Today, public employee unions, neighborhood groups, and county officials areamong those challenging what remains of the machine, and the main goal of many of these groups is to halt the diversion of funds fromessential urban services to expensive transit and land-use projects.

HistoryThe planning that made Portland famous attempts to integrate land-use and transporta-tion. Urban planners have long believed in aland-use-transportation connection that would allow them to manipulate one through the other. So Portland plans land uses to try toreduce the amount of driving people do while it plans transportation to try to slow the con-version of rural land to urban purposes.No such integration was contemplated in 1973, when the Oregon legislature required every city and county to write plans that con-formed to goals and guidelines established by a Land Conservation and Development Commission appointed by the governor. Therules aimed to protect farmland from leapfrog development (subdivisions not physically adjacent to the nearest urban area) by requir-ing all cities in the state to draw urban-growth boundaries. Development inside the bound-aries was allowed to proceed unchecked whiledevelopment outside was strictly limited to rural uses.The commission’s rules specified that the initial urban-growth boundaries should include enough land to accommodate twentyyears worth of growth. As that land was devel-oped, cities were to expand the boundaries to maintain land and housing affordability.

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Indeed, due in part to a severe recession, hous-ing in Portland and other Oregon cities remained very affordable through 1989.5 The goal was to keep development orderly and effi-cient, not to slow or stop development.Transportation planning was a completely separate process, responding mainly to federal funding and mandates. Inspired by federal support for 90 percent of the cost of urban interstate freeways, Portland had planned a gridded network of such highways. But the early 1970s saw a backlash against urban inter-states from neighborhood residents who argued that freeways reduced their property values. In response, Congress passed a law allowing cities to cancel planned interstate highway projects and to spend the money on mass transit capital improvements instead.6 Under Mayor Neil Goldschmidt, Portland became one of the first cities to take advantage of the law, canceling a road known as the Mt. Hood Freeway in 1974. But that created a dilemma for the city. The federal share of the freeway cost would be enough to buy hundreds of new buses. But Portland’s transit agency did not have the funds to operate that many new buses. Moreover, simply buying buses did not create the local construction jobs and profits that would have been gained from freeway con-struction.Goldschmidt’s solution was light-rail tran-sit, a sort of heavy-duty streetcar that some-times operated in streets and sometimes on an exclusive right of way. The term light rail had been coined in 1972; light referred not to weight of the vehicles or the rails but to the smaller numbers of people carried by these rail vehicles relative to the large numbers carried by the New York City subway or other heavy-rail lines such as Washington’s Metro.For Goldschmidt, the big advantage of light rail was that it was expensive, easily cost-ing enough to absorb most of the federal funds that had been allocated to the Mt. Hood Freeway and (as it turned out) much more. Rail construction also provided lots of jobs and profits for local contractors.At the time, few observers noted the irony that an urban transit technology was selected

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precisely because of its high cost. PresidentCarter was so impressed with Goldschmidt’s innovative solution to the freeway controversy that he made Goldschmidt his second secre-tary of transportation. As it turned out, light rail required so much planning and design work that construction did not begin until Goldschmidt had left that office in 1981 and was not completed until Goldschmidt was running for governor of Oregon in 1986. Until that point, there was still no con-nection between Portland’s land-use and transportation planning. But when the light-rail line opened, the city zoned much of the land near light-rail stations for high-density housing in order to allow more people to live within walking distance of the light rail. During Goldschmidt’s term as governor, the Land Conservation and Development Commission began writing a transportation-planning rule.7 This rule was heavily influ-enced by controversy over another proposed freeway, this one skirting the southwestern suburbs of Portland. A land-use group called 1000 Friends of Oregon argued that the high-way would lead to expansion of the urban-growth boundary and that the city could avoid such expansion by integrating its land-use and transportation planning to emphasize com-pact development that relied on transit, walk-ing, and cycling instead of driving.8The proposed highway was never built and the final transportation-planning rule endorsed the 1000 Friends’ ideas. The rule directed planners in all of Oregon’s major urban areas to change “land-use patterns and transportation systems” so as to reduce per-capita driving by 10 percent in 20 years and 20 percent in 30 years.9 To reach those goals, the rule specified that planners must increase resi-dential densities, promote mixed-use develop-ments, mandate pedestrian-friendly design (meaning, among other things, that retail shops should front on sidewalks and not be separated from streets by large parking lots), and various related policies.10 In 1996, Maryland governor Parris Glendenning applied the term smart growth to this planning philosophy.11 The transportation rule effectively killed

the idea of expanding urban-growth bound-aries to make room for growth. In 1993, Oregon homebuilders asked the legislature to require that boundaries be expanded to maintain a supply of land, but Portland plan-ners convinced the legislature to allow them to instead accommodate growth by rezoning existing neighborhoods to higher densities. In the meantime, Goldschmidt announced in 1990 that he would not run for re-election as governor. His decision, which he blamed on marital issues, was mysterious, as most people believed he would have easily been re-elected and probably gone on to the U.S. Senate. Portlanders later learned that the woman he had seduced when she was a teenager was seek-ing a settlement—he eventually paid her $350,000—and he feared the statutory rape would be made public.12Out of office, Goldschmidt immediately started a political consulting firm that eventu-ally became known as Goldschmidt Imeson Carter. Early clients included Bechtel, Nike, and Weyerhaeuser. Goldschmidt used his many federal, state, and local political contacts to grease the skids for those companies to operate in Oregon’s regulatory environment. Goldschmidt also used his political muscle to have friends, relatives, and political protégés appointed to various high offices. The resulting light-rail mafia shaped Oregon’s integrated land-use and transporta-tion planning system to favor Goldschmidt’s clients and friends. Some of the members of the mafia included:•Bechtel Corporation—Goldschmidt arrangedfor Bechtel to receive a no-bid contract tobuild an extension of Portland’s light-rail line to the city’s airport. Under thecontract, Bechtel was paid $95 millionand given a 99-year lease to 120 acres ofvaluable land near the airport.•Tom Walsh—Longtime Goldschmidtfriend and co-owner of Walsh Construc-tion, which specializes in building high-density housing projects. Goldschmidtarranged for Walsh to be appointed gen-eral manager of Portland’s transit

agency. From that position, Walsh hand-ed out millions of dollars in subsidies tohigh-density, transit-oriented develop-ments, many of which were built byWalsh Construction.•Homer Williams—Goldschmidt arranged forhundreds of millions of dollars of federaland local subsidies to an urban-renewalarea popularly known as the PearlDistrict. Goldschmidt client HomerWilliams built many of the develop-ments in the Pearl and, later, the NorthMacadam District.•Schnitzer Group and Zidell Marine—Ownersof a large block of former industrial landson Portland’s Willamette River waterfrontsouth of downtown, an area called eitherthe North Macadam or South Waterfrontdistrict. They hired Goldschmidt to helpthem plan a low-rise residential develop-ment, but Goldschmidt persuaded themto go for a high-rise development instead.The development, which is being built byHomer Williams, is enjoying nearly $300million in public subsidies.• Oregon Health Sciences University—Goldschmidt served on the board ofdirectors of this nominally publicschool that operates a hospital two-thirds of a mile away and 500 feet abovethe Schnitzer-Zidell land. Goldschmidtpersuaded the hospital to build an aer-ial tramway to access offices and clinicsin the waterfront development andconvinced the Portland city council tohelp subsidize this tram, whose costballooned from Goldschmidt’s initial$5 million estimate to $57 million.13

Goldschmidt’s efforts were not entirely directed to land-use and transportation issues. In 2003, he was involved in a shady deal to takeover Portland General Electric, a utility that served two-thirds of Portland’s residents.14 The State Accident Insurance Fund paid him a mil-lion dollars to help shield the government agency from private competition. Goldschmidt’s wife was superintendent of Portland’s schools,which hired Goldschmidt’s brother in a lucra-

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tive consulting contract. His wife was also avice-president of Pacific Power & Light, Oregon’s largest electric utility.15All in all, Goldschmidt was easily the most powerful man in Oregon.16 Inresponse to that power, “the city and the Portland Development Commission went crazy,” observes Lewis & Clark law profes-sor (and popular blogger) Jack Bogdanski, “throwing money at Goldschmidt clients like there was no tomorrow, making all sorts of dubious deals.”17Was Portland’s land-use and transporta-tion planning system nothing more than a giant real estate scam for Goldschmidt’s clients and cronies? To help answer that ques-tion, this paper will first examine some of the benefits claimed for Portland’s planning sys-tem and then look at some of the costs.

The Portland MythsPortland planners and officials have done their best to promote claims that their inte-grated planning process is successful. In par-ticular, they say that

iting Portland for the BBC.18 Portland “lovesto ride” transit, said the New York Times.19 But the sad truth is that Portland’s transit num-bers are little better than mediocre.More than 97 percent of all motorized passenger travel (and virtually all freightmovement) in the Portland area is by auto-mobile. Though transit’s share of passenger travel has fluctuated between 1.8 and 2.6 per-cent over the past 35 years, it has never made a significant dent in auto usage.Portland’s transit agency, TriMet, accu-rately brags that Portland transit usage grew faster than driving in the 1990s. But it fails tomention that transit’s share declined in the 1980s, when the region’s first light-rail line was under construction. In 1980 more than2.6 percent of motorized passenger travel in the Portland area used transit. By 1990, that had fallen to 1.8 percent. Over the next 12years, it slowly climbed to 2.3 percent but still remained well below the 1980 level. Since 2002 it has stagnated or slightly fallen.20Even if it were still increasing, the difference between 1.8 and 2.6 percent means taking less than 1 percent of cars off the road.Because transit’s major market is com-muters, many prefer to measure transit by its share of commuting rather than of total pas-senger travel. During the 1970s, TriMet made many improvements in bus service, including building a downtown transit mall, increasingbus frequencies, and providing commuters with park-and-ride stations. Between 1970 and 1980, total transit ridership tripled andthe share of commuters taking transit to work increased from 7.0 to 9.8 percent.21After construction began on Portland’s first light-rail line, however, cost overruns forced TriMet to raise bus fares and reduceservice. By 1990, four years after the light-rail line opened, only 6.7 percent of commuters rode transit to work—less than in 1970.Ridership recovered in the 1990s, but by 2000 the share of commuters using transit was still only 7.7 percent, well under the 1980rate. By comparison, buses in Portland’s rival to the north, Seattle, carried a smaller per-centage of travel than Portland in 1980, but

were ahead of Portland’s bus-and-light-railsystem in 1990 and 2000.22Transit works best at taking commuters to centrally located jobs. In 2001, TriMet was proud to say that 46 percent of all downtown Portland workers rode transit to work. Only 11 percent of Portland-area commuters work downtown, so on a regional level this is not very important. But transit did help relieve congestion and parking problems in the downtown area. By 2005, however, the num-ber of downtown workers commuting by transit declined by more than 20 percent, while the number driving to work increased. The result was that transit’s share of down-town commuting fell to just 38 percent.23 One reason for this decline is that TriMet had to make service cuts due to the 2001 recession. The high cost of new rail lines and inflexible light-rail mortgage payments forced the agency to cut deeper than would have been necessary if it operated a debt-free, bus-only system.24High gas prices in 2006 led to record rid-ership levels for many transit agencies.25 But due to budget and service cuts, Portland transit ridership grew by an anemic 0.1 per-cent.26Even with adequate budgets, Portland planners themselves do not predict that their plans will lead to a huge shift in travel habits. A 1997 regional plan called for a 70 percent increase in population densities within the urban-growth boundary and the construc-tion of 125 miles of rail transit and scores of high-density, transit-oriented developments. Planners projected that these actions would reduce the share of trips taken by automobile from 92 percent in 1990 down to 88 percent in 2040. Since planners also anticipate a 70 percent population increase during that time, the small decline in driving’s share of travel would not prevent a huge increase in traffic congestion.27In short, Portland’s integrated land-use and transportation planning has not pro-duced any miracles for transit. If transit plays a slightly greater role in regional travel than in some other cities, it plays a smaller role

than in Portland’s closest peer, Seattle, whichuntil 2000 had no rail transit.

Myth #2: Transit-Oriented DevelopmentOne of the highlights of any tour of Portland offered by planning officials is a visit to one of the many transit-orienteddevelopments that have sprung up all over the region. These high-density, mixed-use developments are supposed to herald a newlifestyle that uses less land and resources because people live in multifamily housing or in homes on tiny lots, walk to shops, taketransit to work, and generally drive far less than people living in traditional suburbs.Many transit-oriented developments, or TODs as planners call them, are built right next to light-rail stations. A typical develop-ment is four to five stories tall, with shops and offices on the ground floor and apartments or condos above. One famous transit-orientedvillage, Orenco, was built when a light-rail line was constructed across prime farmland with the express purpose of subdividing that landinto a high-density development.Tour guides usually neglect to mention several important points about Portland TODs:

1. They are heavily subsidized, manyreceiving tens of millions of dollars ofsupport in the form of tax breaks,infrastructure subsidies, below-marketland sales, and direct grants.2. Despite the subsidies, vacancy rates areoften high, particularly in areas desig-nated for shops.3. While these developments may attractsome people who prefer not to drive,there is little evidence that they havesignificantly changed people’s travelhabits.

As previously noted, when Portland’s first light-rail line opened for business in 1986, the city zoned much of the land near light-

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rail stations for high-density development.Ten years later, city planner Mike Saba sadly reported to the Portland city council, “we have not seen any of the kind of develop-ment—of a mid-rise, higher-density, mixed-use, mixed-income type—that we would’ve liked to have seen” along the light-rail line. City Commissioner Charles Hales noted, “We are in the hottest real estate market in the country,” yet city planning maps revealed that “most of those sites [along the light-rail line] are still vacant.”28 To correct this, Hales convinced the council to offer developers 10 years of property tax waivers for any high-density housing built near light-rail stations. Over the next decade, the city experienced a boom in high-density developments, virtually all of which were subsidized. Even with the subsidies, planners and developers soon learned that so-called transit-oriented develop-ments only work if they have plenty of parking. For example, the state of Oregon owned land next to a light-rail station in east Portland. In 1998, the state sold the land to developers at below-market prices and develop-ers received a total of $13 million in subsidies to build a $31-million, high-density project called Center Commons. The development provides less than two-thirds of a parking space per dwelling unit, but residents handle that by freely parking on the sidewalk and in areas clearly marked as fire lanes.29Despite those problems, the city considers the project a success. When asked for a defini-tion of success, an official replied, “When the construction was completed, the project became a success.” In other words, “it’s not just a matter of ‘build it and they will come,’” com-ments John Charles of the Cascade Policy Institute; “simply building it is enough.”30 Another development called The Round is located in the Portland suburb of Beaverton. Beaverton gave $12.4 million in subsidies to the developer, who was supposed to build a retail-office-housing complex sur-rounding a light-rail station.31 Yet bankswere unwilling to finance a development with inadequate parking, so the developer went bankrupt and the project sat half-com-

pleted for several years. Finally, the city founda new developer who finished it—on the con-dition that the design would be modified to include 700 parking spaces. “The key compo-nent is parking,” said the developer.32 Yet vacancy rates remained high after construc-tion, partly because the development still hadparking shortages.33Another development, Beaverton Creek, is located next to a huge light-rail park-and-ride lot. But the parking is open only to light-rail riders. With little or no parking available to customers of the ground-floor retail shops, nearly all of those shops remainvacant several years after it was completed.Parking problems also plagued Orenco, the pride and joy of Portland-area planners. Planners allowed only limited parking in theareas closest to the light-rail station, and more parking further away. As a result, the areas near the station were the last to bedeveloped, so most of the residences are not within walking distance of the station.34 The developer who built much of Orenco called it“our nonprofit wing,” implying that his com-pany only built it so it could get permits to build more lucrative developments of single-family homes on larger lots.35A survey of Orenco residents by Lewis & Clark College researcher Bruce Podobnik found that most of them liked the develop-ment but that few had changed their travel habits. “Though some have increased their reliance on mass transit for occasional tripssince moving into Orenco Station, most resi-dents of the neighborhood report using alternative modes of transportation far lessthan do their counterparts in Northeast Portland,” says Podobnik. “A key objective, that of significantly altering resident trans-portation habits, therefore remains to be achieved in Orenco Station.”36One of the most embarrassing failures of Portland’s transit-oriented planning was Cascade Station, an office-and-retail parkthat was supposed to be built on the 120 acres of land given to Bechtel in exchange for the company building the airport light-railline. Because the land was immediately adja-

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Even when theyare next tolight-rail stations, transit-oriented developmentsonly work when they have plenty of parking.

cent to the airport, it was not suitable for res-idential use, but planners zoned it for small-box retail—shops no larger than 60,000 square feet—because big-box retail (stores of 100,000 to 300,000 square feet) would be too “auto dependent.” Although the city spent $28 million on parks, utilities, streets, and sidewalks, no one wanted to lease a small shop or office on a site that was miles from any residential areas, so the area remained vacant for five years after the light-rail line opened in 2001.37Rail skeptics were amused that every light-rail car going to and from the airport duti-fully stopped at both of Cascade Station’s rail stations, even though no one wanted to get on or off. Apparently, not stopping would have disrupted the schedules. Critics were even more amused when a passenger did board the rail car one day: a coyote looking for solitude aboard one of TriMet’s empty trolley cars.38Finally, planners caved in to developers who insisted that small-box retail made no sense at the site. Instead, the city has persuad-ed Ikea to build a 280,000-square-foot store on the site and hopes to attract at least one other big-box store (though not one headquartered in Bentonville). Apparently, cheap Asian-made goods sold by a Scandanavian retailer are more politically correct than cheap Asian-made goods sold by an Arkansas retailer. Though Ikea will deliver purchases to any cus-tomers who arrive by light rail or stow their bikes in one of the mandated 75 bike racks, the store expects most of its customers to use one of its 1,200 parking spaces.39

Myth #3: Development-Oriented TransitPortland planners believe in the “field of dreams”: “Build it, and they will come.”40 TriMet claimed that Portland’s first light-rail line stimulated more than $1 billion worth of development.41 After Portland built a down-town streetcar line, planners claimed that it stimulated $2.3 billion worth of develop-

ment.42 And after Portland’s aerial tram wasbuilt, planners claimed it generated $1 bil-lion worth of development.43The first problem with these claims is planners’ assumption that correlation proves causation. In counting developments sup-posedly “stimulated” by transit, planners simply added up all the value of develop-ments within a few blocks of transit lines orstations. They made no attempt to insure that the developments really had anything to do with transit.Measured by value, the vast majority of the $1 billion of investments supposedly stimulated by the light rail consists of gov-ernment buildings, some built in response to executive orders by President Clinton and Oregon’s Governor Barbara Roberts that allfederal and state agencies should relocate to downtown areas.44 One government-funded building supposedly stimulated by the light-rail line was a $5 million downtown parking garage. If light-rail works so well, why is a new garage needed and in what sense did light railstimulate the construction of that garage?The second problem with claims that tran-sit stimulated new development is that they are based on double counting. For example, thestreetcar and aerial tram both serve the same area, so all of the $1 billion in development supposedly stimulated by the aerial tram isincluded in the $2.3 billion in development supposedly stimulated by the streetcar.45The biggest problem with the claim that transit stimulates development is that most of the private developments themselves receivedhuge subsidies. The Portland Development Commission (the city’s urban-renewal agency) uses tax-increment financing and federalgrants to subsidize developments in urban-renewal areas. In recent years, those areas have focused on transit zones and corridors. (For adescription of how tax-increment financing works, see “Problem #3” below.)The Portland streetcar, for example, trav-els almost entirely within the River, South Park Blocks, and North Macadam urban-renewal districts. New developments in these districts received more than $665 million of

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tax-increment financed subsidies from thePortland Development Commission. The North Macadam District, which received at least $289 million of these subsidies, is also the location of the aerial tram. It is fair to say that the subsidies played a much larger role in redevelopment than a 7-mile-per-hour streetcar line or 13-mile-per-hour tram. Other subsidies include Federal Transit Administration grants to transit-oriented developments; U.S. Department of Transpor-tation grants for “congestion mitigation,” and (as previously mentioned) below-market land sales and 10-year tax waivers for high-density housing.46 When tax-increment finance dis-tricts aimed at supporting new light-rail lines are added, subsidies to Portland-area transit-oriented developments probably come close to $2 billion, not counting the cost of light rail, streetcars, or other transit projects. Portland’s story of spending $90 million on a streetcar line to get $2.3 billion of devel-opment, or $57 million on an aerial tram to get $1 billion of development, sounds attrac-tive to officials from other cities. It might not sound so attractive if Portland admitted that it really had to spend $665 million, in addi-tion to the cost of the streetcar line and tram, not to mention 10-year tax waivers on at least $100 million of development, to get that $2.3 billion worth of development.“It is a myth to think that the market will take care of development along transit corri-dors,” said Portland City Commissioner Charles Hales in 1996, when he proposed to subsidize such developments.47 “The $55 million streetcar line has sparked more than $1.5 billion (and growing) in new develop-ment,” said consultant Charles Hales 10 years later, working to sell streetcars to other cities and conveniently forgetting about the subsidies he promoted when he was on the city council.48“Look at all the cranes in the city,” says developer Homer Williams. “Outside of two or three exceptions, it’s all because of the street-car.”49 Yes, because of the streetcar and the hundreds of millions of dollars in subsidies in the areas served by the streetcar. While transit

may be a catalyst for subsidies to develop-ment, it is not itself a catalyst for development.

Myth #4:Portland Curbed SprawlEven if Portland’s integrated land and transportation planning is not changing people’s travel habits, planning advocatescontent themselves with the thought that Portland is at least preserving farmland and curbing sprawl. After all, according to theCensus Bureau, between 1990 and 2000, the population density of the Portland urbanized area increased by 10.6 percent.50One problem with this reasoning is that many urban areas that have no urban-growth boundaries increased their densities by evenmore than 10.6 percent. During the 1990s, Kansas City’s density increased by 39 percent; Phoenix’s by 34 percent; Dallas-Ft. Worth’s by33 percent; San Antonio’s by 26 percent; Houston’s by 20 percent; and Orlando’s by 13 percent.51 One reason for these increases isthat the Census Bureau changed its definition of urbanized area so as to eliminate vacant lands that had previously been included.Another reason for Portland’s increased density is that much of the growth took place as “infill” on prime farmlands, such asOrenco, that happened to be inside the region’s urban-growth boundary. This sug-gests that planners are not so much protect-ing farmlands as determining which farmers get to enjoy windfall profits because they are inside an imaginary line.At the same time that newcomers increased the Portland area’s density, large numbers of other people escaped Portland’splanning system by moving to Vancouver, Washington; Salem, Oregon; and other com-munities outside the reach of Portland plan-ners. As land-use rules drove up housing prices, many people with Portland-area jobs moved to communities outside the bound-ary. “Middle-class people are moving to the suburbs for bigger houses,” admits Portland city commissioner Erik Sten.52

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Rail transit is nota catalyst fordevelopment; it is a catalyst for subsidies todevelopment.

Between 1990 and 2000, Portland grew by21 percent, while its Oregon suburbs such as Beaverton and Gresham grew by 30 to 40 per-cent. Meanwhile, Vancouver, Washington— directly across the Columbia River from Portland but beyond the reach of Portland planners—grew by 210 percent.53 Though Vancouver started the decade with barely 10 percent of Portland’s population, it actually gained more new residents during the 1990s than the city of Portland.Meanwhile, 45 miles south of Portland, Salem grew fast enough to overtake Eugene as Oregon’s second-largest city in 2001. Like all Oregon cities, Salem has an urban-growth boundary, but planners there were less aggres-sive than in Portland and so Salem’s housing market has remained more affordable.54 Rather than preventing sprawl, Portland’s planning has to some degree accelerated it. Instead of leading people to drive less, the plans are forcing people to commute long distances to find affordable housing.

Myth #5:Portlanders Love PlanningPortland’s planning represents “truedirect democracy in action,” says the BBC.55 Hardly: Several recent elections and other events have seen defeats for the planners, but they continue to plan anyway.• In 1995, planners began rezoningneighborhoods to higher densities. Thefirst neighborhood targeted for densifi-cation was Oak Grove, where I lived atthe time. When planners held publichearings to find out how residents feltabout the plan, they were confronted byhundreds of angry homeowners. Localgovernment officials reluctantly askedMetro, Portland’s regional planningagency, to take Oak Grove off the list ofneighborhoods slated for rezoning, say-ing “there is no community support”for the plan.56 Metro and other localgovernments responded by not holding

public hearings in most other neigh-borhoods slated for densification.Instead, plans were written by commit-tees consisting of a few neighborhoodresidents who were prescreened toinsure they supported Portland’s densi-fication, along with many more nonres-idents, such as officials representingTriMet and other government agencies.• In 1997 voters in the Portland suburbof Milwaukie recalled their mayor anda majority of their city council fromoffice because the council hadapproved a plan to rezone part of thecity for higher densities.57 Plannerswere greatly relieved when no other cityfollowed the suburb’s example.• Public hearings held in 1998 on light-rail expansion plans revealed planners’lack of commitment to the democraticprocess. At the first few hearings, plan-ners intimidated anyone who attempt-ed to distribute anti-light-rail litera-ture, even just copies of their testimo-ny, by threatening them with arrest for“criminal trespass.”58 Metro changedthis policy after it realized that the FirstAmendment allowed people to expresstheir opinions at public hearings.• In November, 1998, Portland-area vot-ers rejected, by 47-to-53, the proposedexpansion to the light-rail system. YetTriMet is expanding anyway, using tax-increment financing—the only waylocal officials in Oregon can use prop-erty taxes without a public vote—tofinance the new lines.• In 2002 planning opponents put a mea-sure on the ballot that would forbidMetro, Portland’s regional planningagency, from requiring that more neigh-borhoods be rezoned to higher densities.Having already densified dozens ofneighborhoods, Metro responded withits own measure that put a moratoriumon densification through 2015.Planning advocates claimed victorywhen Metro’s measure won—but if theyhad really believed that voters supported

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their density plans, they would simplyhave opposed the original anti-densitymeasure.• In 2004 property-rights activists putmeasure 37 on the ballot, allowing any-one whose property values had beenreduced by planning and zoning to askfor either compensation or to have therules waived. Planning advocates spent$2.7 million to argue that this woulddestroy Oregon’s land-use planningsystem. Though measure 37’s support-ers spent barely a third of that amountpromoting it, the measure passed by 61percent, winning a majority of the votesin every county in the Portland area. • In 2005 Portland’s incoming mayor,Tom Potter, announced a “VisionPDX”process that would allow Portland resi-dents to “create a vision for Portlandfor the next 20 years and beyond.”59After collecting people’s opinions formore than a year, a draft report revealedsignificant uneasiness with thePortland’s plans. Respondents “worryabout a growing gap betweenPortland’s haves and have-nots—inschools, health care and the prioritiesof city government,” says the draft. Inparticular, many people think “thetram/South Waterfront/North Macadamdevelopment (not to mention the Pearl,which seems to have become a verb, asin ‘to Pearlize’) was a total waste ofmoney.”60

Far from representing direct democracy in action, Portland’s programs are a classic example of arrogant government planners doing their best to sidestep the public’s wish-es. “Portland-area residents have not know-ingly consented to be willing research sub-jects in a radical experiment,” warned a Portland State University professor of urban studies in 1995.61 The Goldschmidt affair revealed that, not only was Portland’s plan a radical experiment, it was manipulated by special interests to maximize the profits of selected developers and rail contractors. The

only question left is how Portlanders willoverturn the dominant paradigm.

Problems withPortland’s PlansThe previous discussion has already hinted at some of the major drawbacks of Portland’s integrated land-use and transportation plan-ning. These include the following:

Problem #1:Unaffordable HousingDuring the 1990s, housing affordability declined by more in Portland than in any other urban area in the United States. Today, Portlandremains more affordable than most California housing markets, but it is far less affordable than many less-regulated housing markets,such as Atlanta, Raleigh, and Houston.A standard measure of a region’s affordabil-ity is median home price divided by median family income. A price-to-income ratio of 2 orless is very affordable, whereas markets with ratios above 3 verge on unaffordable. At cur-rent interest rates and a price-to-income ratioof 3, a family devoting a quarter of its income to mortgage payments would need 17 years to pay it off. At a ratio of 4, it would need 32 years,and at a ratio of 5, it could never pay it off.The decennial census estimates both medi-an family income and median home value for the year prior to each census. Census data revealthat almost all U.S. regions outside of Hawaii (which passed growth-management planning legislation in 1960) had affordable housing in

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Far fromrepresentingdirect democracy in action,Portland’sprograms are a classic example of arrogantgovernment planners doing their best tosidestep thepublic’s wishes.

1969. During the 1970s, many counties inCalifornia imposed urban-growth boundaries and other growth-management tools. By 1979, most California housing prices had become as unaffordable as those found in Hawaii.Oregon urban-growth boundaries were imposed in 1979-85, but a severe recession that caused the state to actually lose popula-tion during some years in the 1980s kept housing affordable through 1989. As the state’s economy recovered after that year, prices rapidly accelerated.Growth boundaries limit the supply of land available for new home construction. In 1990, builders could buy an acre suitable for residential use in the Portland area for $25,000.62 By 1997, the cost of the same acre was between $150,000 and $200,000. Because median incomes had not increased signifi-cantly, the National Association of Home Builders ranked Portland the second-least affordable housing market in the country.63 Growth boundaries are not the only cause of unaffordable housing. Other problems include impact fees and an onerous permitting process that allows anyone in the state to chal-lenge a proposed development without hiring an attorney. One result of this regulation is reduced competition in the housing market. “The urban growth boundary has really been our friend,” says a leading Portland home-builder. “It kept the major builders out of the market.”64 Of course, in this case what is good for homebuilders is bad for homebuyers. In 1989, Portland’s value-to-income ratio was less than 2. By 1999, it had increased to more than 3. It was no fluke that this increase was greater than that of any other U.S. urban area: the second- and third-greatest increases were in Salem and Eugene, Oregon. Today, as noted in the discussion of Mayor Potter’s VisionPDX, housing affordability is a major concern for many Portland-area residents. Unaffordable housing hits low-income families particularly hard. With the growth boundary limiting new home construction, many young families are gentrifying low-income neighborhoods in Portland, pushing former renters in those neighborhoods out

of single-family homes and into multifamilyhousing.65 “People who don’t have choices are getting pushed out as rents go up,” says city commissioner Eric Sten.66Although planners never actually said they wanted to increase housing prices, it is not clear that they see high prices as a problem. “Ifpeople want a compact urban area,” said Metro’s chief land-use planner in 1996, “some increase in the price of housing is going tooccur.”67 Higher prices would discourage peo-ple from living in homes with large yards and encourage more people to live in multi-familyhousing, which planners considered to be a good thing. In 2005, planners were elated to find that land and housing prices had gone sohigh that—without any subsidies—developers were tearing down suburban homes and replacing them with high-density housing.68Yet high housing prices cause several serious problems. First, they deny low-income families the opportunity to achieve the American dreamof homeownership. “Insidiously, the burden of site-supply restrictions will fall disproportion-ately on poor and minority families,” saysPortland economist Randall Pozdena. Pozdena estimates that if Portland’s planning measures had been applied nationwide during the 1990s,more than a million young and low-income families would have been prevented from buy-ing homes.69High housing prices may create windfall profits for some homeowners—but it is mere-ly a paper profit unless they plan to sell andthen move to a lower-cost region or a smaller home. However, this windfall, too, is inequitable, as the people buying their firsthomes tend to be less wealthy than those who already own their homes.High housing prices also slow the growth of urban areas. Silicon Valley saw an exodus of firms to the Portland area in the early 1990s,when Portland was still affordable. But by 2000, Portland’s high housing prices led many potential employers to look to Boise, Omaha,or other affordable communities.Research in Britain, which has practiced growth management since 1947 and suffers from some of the highest housing prices in

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the world, found that neighborhoods withhigh homeownership rates tend to have higher unemployment rates than communi-ties with high rental rates.70 High housing prices make the cost of moving unaffordable, effectively immobilizing the population. Harvard economist Edward Glaeser has found that growth management makes both housing prices and local employment rates more volatile. “In the long run, firms general-ly leave high-cost areas,” says Glaeser, so “places with rapid price increases over one five-year period are more likely to have income and employment declines over the next five-year period.”71 It is not surprising, then, that in much of 2001 and 2002Portland had some of the highest unemploy-ment rates of any major metropolitan area.72

Problem #2: CongestionBetween 1982 and 2003, the amount of time the average commuter wasted in traffic increased more rapidly in Portland than in Atlanta, Boston, Denver, Los Angeles, New York, Phoenix, or San Francisco—more, in fact, than in almost any other U.S. urban area.73 This was not an unintended conse-quence of Portland’s planning—in fact, it was part of the plan.Increased congestion will “signal positive urban development,” says a 1996 report from Portland’s Metro.74 Three years later, Metro’s regional transportation plan declared, “trans-portation solutions aimed solely at relieving congestion are inappropriate.”75 In fact, Metro has decided that “level of service F”—the trans-portation engineer’s term for near gridlock—is “acceptable” during rush hour throughout most of the Portland area. Why? Because, says Metro’s leading transportation planner, relieving congestion “would eliminate transit ridership.”76 Following are just a few examples of how Portland planners are letting congestion increase.• The biggest bottleneck in the Portlandarea is on Interstate 5 between Portlandand Vancouver, just south of the bridge

crossing the Columbia River, where thethree southbound lanes shrink to twolanes for just 0.8 miles. The result ishuge traffic backups as all the Portlandworkers who found affordable housingin Vancouver try to get to work eachmorning. Metro’s 1995 transportationplan estimated that it would cost only$10 million to add a third lane to thissegment, but to this date nothing hasbeen done.77 In 1998, Henry Hewitt,chair of the Oregon TransportationCommis-sion, told a legislative commit-tee that Metro had asked the depart-ment not to fix the bottleneck.78• U.S. Representative David Wu (D), whorepresents west Portland, earmarkedfederal funds to expand state highway217, which may be the second-mostcongested freeway in the Portland areaafter I-5. Metro turned the moneydown, saying it had other priorities.79• Portland’s 82-year-old Sellwood Bridge,the busiest two-lane bridge in Oregon,is structurally failing and was closed totrucks and buses in 2004. The BechtelCorporation offered to replace thebridge by 2010, but Metro andMultnomah County (which owns thebridge) turned them down. Due totheir lengthy planning processes, theydon’t even expect to begin constructionbefore 2010.80 When they finally do,they almost certainly will not addcapacity for anything except bicycles.• Rather than increase roadway capacity,Portland is actively reducing the capac-ity of many arterials and collectors tohandle traffic. Speed humps and curbextensions have been added to suchcollectors as Belmont and Stark streets,while arterials such as Sandy, Barbur,and McLoughlin have been slated forboulevarding, also known as arterialtraffic calming, which means removingright- and left-turn lanes.

commuters more than $500 million in wast-ed time and fuel in 2003, a 1900-percent increase from 1982.81 A study prepared for Metro and the Portland Business Alliance estimates that the cost of congestion to busi-nesses is of the same order of magnitude.82 In its 2020 regional transportation plan (published in 2002), Metro predicted that its plans would increase the amount of time Portlanders waste sitting in traffic more than 6.6 times.83 Congestion would increase despite all of the region’s land-use and transit plans because those programs, predicted planners, would attract no more than about 4 percent of auto drivers to other modes of travel.84 When asked about those predictions, which were in his own agency’s report, Mike Burton, Metro’s elected executive, told a legislative committee, “Nobody believes those numbers.”85 In 2007, the Federal Highway Administra-tion chastised Metro for its anti-auto trans-portation plans. “It is difficult to find the transportation focus” in Metro’s regional transportation plan. Metro “should acknowl-edge that automobiles are the preferred mode of transport by the citizens of Portland,” added the agency. “They vote with their cars every day.”86 Based on that “vote,” “The trans-portation solution for a large and vibrant metropolitan region like metropolitan Portland should include additional highway capacity options.”87

Problem #3:Increased Taxes/ReducedUrban ServicesOn September 17, 2006, developer Homer Williams was eating dinner on the patio at the Bluehour, the ritziest restaurant in the Pearl District, when he saw police subdue a man on the sidewalk outside. Williams later told police he was struck by the “casualness” of the situation.88It was anything but casual for James Chasse, the man in custody. A talented musi-cian who had schizophrenia, Chasse was fine as long as he took his medications. But a

nonprofit mental health clinic received areport on September 15 that he was not eat-ing and had probably stopped taking his medicine. When someone working for theclinic tried to find him, Chasse fled in panic.Two days later, police officer Christopher Humphries saw Chasse and assumed he was drunk or on drugs. When Humphries tried toapproach, Chasse ran away. Humphries tack-led him and, according to witnesses, punched and kicked him several times.89 While in cus-tody, Chasse died of chest injuries.Portland mental health advocates were outraged that many of the programs that could have saved Chasse’s life had sufferedrecent budget cuts: community policing,90 a crisis triage center,91 and the city’s mental health program.92 Yet the city continues tospend tens of millions of dollars a year subsi-dizing high-density developments. “So while some poor mentally ill guy lay there with hislife ebbing away,” blogger Jack Bogdanski scathingly comments, “the big-shot real-estate sharpie sat with his cloth napkin on,eating his braised veal ravioli with truffles.”93Between 10-year property tax waivers for high-density housing and tax-increment financing for transit-oriented developments,Portland has diverted tens of millions of dol-lars of tax revenues a year from schools, police, fire, public health, and other urbanservices. This has contributed to funding crises for many of those services, even as developers like Homer Williams continue toenjoy hundreds of millions of dollars in sub-sidies for their projects.As of 2003 nearly $1.4 billion worth of property had received tax waivers in Multnomah County (where most ofPortland is located). About $214 million of that was specifically for Portland’s high-den-sity or transit-oriented plans, representinglost tax revenues of about $4 million per year. Another $600 million is for improvements and renovations to historic properties. About60 percent of these improvements, by value, are near the light-rail or streetcar lines, and many were counted by Portland planners asdevelopments stimulated by rail transit.94

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Portland has 10 urban-renewal districts, atleast 7 of which were created specifically to sup-port rail transit and transit-oriented develop-ments. The city uses tax-increment financing (TIF), a technique first developed to promote urban renewal in California in 1953. Since then, TIF has become the primary means of financing urban renewal in every state but Arizona. Tax-increment financing provides the funds used for eminent domain in urban-renewal areas; without TIF, cases like Kelo v. City of New London would never have happened. Originally, urban renewal was supposed to be a way for cities to kick-start development in areas so blighted that property owners and developers would not invest in improvements. Today, it is often used by planners to shape development in areas that developers would gladly invest in without subsidies.95 Planners use the TIF money to subsidize developments that are less marketable but more politically correct than the ones developers would build without subsidies. Often, that means high-density, mixed-use developments. Under tax-increment financing, the exist-ing property taxes collected from an urban renewal district are frozen, meaning they are distributed, as before, to schools and other services. All property taxes collected on new improvements—the increment—are used to subsidize those improvements. In most cases, planners estimate the revenues they will get from those improvements, then sell bonds that will be repaid by those revenues. The bonds are used to pay for infrastructure, below-market land sales, and sometimes direct grants to the developers.Portland has authorized the sale of $1.7 bil-lion worth of TIF bonds to support its 10 urban renewal districts. About $1.2 billion of the bonds are for the seven districts created specifi-cally for rail and transit-oriented development. They include the River District (created for the streetcar and the Pearl; $234 million), Airport Way (created for the airport light rail and Cascade Station; $73 million), North Macadam (created for the South Waterfront/aerial tram/streetcar; $289 million), Interstate (creat-ed for the Interstate light-rail; $335 million),

Gateway (created for the airport light-rail; $164million), Lents (created for a proposed light rail to Clackamas County; $75 million), and Central Eastside (created for a proposed light-rail line and transit-oriented developments; $66 million).96 It is likely that bonding authority for the Central Eastside and Lents districts willincrease as plans for those areas progress.At least some of the money spent on the districts not created specifically for rail tran-sit and TODs has still gone to support thoseactivities. The streetcar was built with the help of $7.5 million of the $144 million in bonds for the South Park Blocks District.97Many of the improvements in that district and the Convention Center District ($168 million) were counted by planners as invest-ments generated by rail transit.98According to Multnomah County, the actu-al taxes diverted to Portland urban renewal totaled $66 million in 2006, $41 million ofwhich went to the rail-TOD districts.99 That amounts to about 6 to 7 percent of total prop-erty tax collections in Multnomah County.100Many of Portland’s suburbs, including Gresham, Wilsonville, and Tualatin, have their own urban-renewal districts used to subsidizetheir own transit-oriented developments.The Chasse tragedy symbolized the many problems caused by the diversion of funds from schools, police, public health, and otherservices. Portland’s schools are particularly squeezed by tax breaks and urban renewal.Due to Portland’s high housing prices, a disproportionate number of families with chil-dren have moved to suburban or exurban areaswhere they can afford a house with a yard. As a result, only 21 percent of city of Portland resi-dents are under the age of 18, compared to 27percent of Portland’s suburban residents.101 While suburban school districts are building new schools, Portland’s is closing five to sevenschools per year. Despite the closures, Portland’s school district projected a $57 mil-lion shortfall in its 2007 budget. Such short-falls are only driving more families with chil-dren to the suburbs.102 When Portland’s mayor suggested a city income tax to help schools, theidea sank like a lead aerial tram.103

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Tax-incrementfinancingprovides the money foreminent domain in urban-renewal areas; without TIF, cases likeKelo v. City of New London would never havehappened.

All of these diversions have raised the ireof the public employees’ unions and others who work for or rely on the services that are being cut. These groups are engaged in “a huge battle for the control of the Rose City,” observes writer Phil Stanford, author of Portland Confidential, a book about corrup-tion in the 1950s and ‘60s. “What’s left of the old Neil Goldschmidt machine,” says Stanford, is “struggling to maintain the hold it’s had on the city’s purse strings.”104 One of the leading opponents of the Goldschmidt program, City Commissioner Randy Leonard, represented firefighter unions before being elected. Since Portland firefight-ers get more than 90 percent of their funds from property taxes, they are understandably concerned about tax-increment financing.105 Another opponent, Amanda Fritz—who chal-lenged an incumbent Goldschmidt supporter for city council in 2006—has represented nurs-es unions. Although Fritz did not win, Leonard survived a strong challenge from a Goldschmidt supporter in the same election.Most recently, groups ranging from the League of Women Voters to the chair of the Multnomah County Commission are oppos-ing an extension of the Portland streetcar that would require more TIF money. The League worries that TIF saps spending on schools and social services. Multnomah County says that urban renewal costs it $14 million per year.106 In any case, says Stanford, “it looks like the political machine that’s called the shots in Portland for almost 50 years is crumbling.”107

Problem #4: Business-Unfriendly EnvironmentColumbia Sportswear, one of Oregon’s largest companies, was headquartered in North Portland but wanted to relocate to a larger space. In 2000 it found a location in the Central Eastside urban-renewal district, and the city of Portland was pleased to wel-come the company there.After making plans for the new office, how-ever, the company was told by Portland plan-

ners that it could not have any surface parkingat the site because “it’s a light-rail station.” There is no light-rail line anywhere nearby, and voters had turned down funds to buildsuch a line, but the city hoped to eventually build the line anyway, so it declared the park-ing rule to be “nonnegotiable.”108 The compa-ny moved to suburban Washington County instead, and its CEO blasted the city for its anti-business climate.109Homer Williams may find Portland to be a business-friendly environment. But for those who cannot hire a Neil Goldschmidt tosmooth their way to riches, the cost of doing business in the Portland area is high. That cost includes• The high cost of land for office, indus-trial, or retail operations;• The cost of overcoming Oregon’slengthy and onerous land-use planningprocess when siting such operations;• The cost of congestion, especially forbusinesses that make daily deliveries ofgoods and materials;• The cost of paying workers enough sothat they can afford housing and otherconsumer costs; and• The high tax rates needed to support railtransit and other expensive programs.

Portland seemed to have a business-friend-ly environment in the early 1990s. Housing was still very affordable, especially when com-pared to housing in California. In 1993, the state legislature was prompted by Intel to pass a law allowing cities and counties to tax onlythe first $200 million of the value of chip-mak-ing plants, which were often worth $1 billion or more. This seemed reasonable to manybecause such factories did not consume any more public services than, say, sawmills or other pre-silicon plants.As a result, at least 10 chip factories located in the Portland area, each employing thousands of people. Between 1992 and 1998, the regiongained nearly 200,000 new jobs, a 26-percent increase. Then job growth slowed as high prices for land and housing led employers to look to

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Boise and other low-cost regions to site newfacilities. At its peak, in December 2000, the Portland area had just under a million jobs. By January, 2004, employment had fallen nearly 8 percent to less than 920,000 jobs. Since then, employment has recovered but today stands only slightly above the 2000 peak.110

Conclusions andRecommendationsPortland planning did not start out as a real estate scheme aimed at enriching Neil Goldschmidt and his friends and clients, but it ended up that way. Portland’s planning process was conceived by ideologues who dis-liked the automobile and wanted to preserve all of Oregon’s abundant open space no matter what the cost. It was endorsed by politicians who refused to believe, or simply ignored, pre-dictions that it would hugely increase conges-tion and housing costs. And it was manipulat-ed by a cabal of politically connected business-es seeking to divert the flow of tax dollars into their own pockets. The opportunities for such manipulation were so obvious that, if Neil Goldschmidt had not started the light-rail mafia, it would have been someone else; and if it were not for Goldschmidt’s statutory rape, many Portland-area residents never would have learned about this cabal.The results have been a disaster for the average Portland-area resident. The light-rail and streetcar lines, vibrant downtown streets, and scenic vistas outside the urban-growth boundary may seem attractive to visitors. But residents have to live in unaffordable hous-ing, creep along in traffic congestion, and pay higher taxes or suffer reduced urban services so that the region’s political leaders can fund their rail transit and transit-oriented devel-opment schemes.Portlanders always hoped that planning would save their region from becoming like Los Angeles, the nation’s most congested, most polluted urban area. When Portland planners were in the midst of writing their plan for densifying and railifying the region,

they examined the nation’s 50 largest urbanareas to see which was closest to the vision they had for Portland.It turned out that one region almost pre-cisely matched that vision. The nation’s dens-est urban area was also the major urban areawith the fewest number of miles of freeway per capita. That same area also happened to be spending billions of dollars building newrail transit lines. Which urban area was that? Why, Los Angeles.Despite the popular belief that Los Angeles is the epitome of urban sprawl, it is actually the densest urban area in America—about one third denser than the New York urban area (which includes southwestern Connecticut and northeastern New Jersey).The Los Angeles urban area (which includes Pasadena and much of Orange County) also has only about 53 freeway miles per millionresidents, compared with a national urban area average of 108 miles. Los Angeles is con-gested because it packs so many people into asmall area and doesn’t have enough roads for them to drive on. It is polluted because cars pollute the most in stop-and-go traffic.“In public discussions we gather the gen-eral impression that Los Angeles represents a future to be avoided,” wrote Metro in 1994.Yet “with respect to density and road per capita mileage it displays an investment pat-tern we desire to replicate” in Portland.Rather than see this as a sign that there might be something wrong with their plan, planners merely attributed this to a differ-ence between “perception and reality.”111Portland and Oregon can take several steps to remedy Portland’s problems before they get any worse:• Portland-area voters should dissolveMetro, the regional planning agency,and return planning functions to localgovernments.• The state legislature should repeal theland-use planning laws that are drivingup housing prices and immobilizingthe region’s transportation systems.• As an intermediate step, the state should

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Theopportunities for manipulating the system were so obvious that, if Neil Goldschmidt had not started the light-rail mafia, someone else would have.

People who wantto see theirregions remainlivable shouldlook at Portlandonly as anexample of hownot to plan.

pass legislation requiring Metro or localgovernments to make enough land avail-able for development at marketable densi-ties to maintain a 20-year supply of land.Similar legislation is currently being con-sidered by the California legislature.112 • As suggested by University of Marylandpublic policy professor Robert Nelson,the state could also pass legislation giv-ing groups of homeowners andlandowners the ability to opt out of localland-use planning and zoning by creat-ing a homeowners’ or landowners’ asso-ciation that writes its own plans and pro-tective covenants.113• The state should also create a regionaltollroads authority that can sell bondsbacked to tolls to build highways tomeet the demand as measured bymotorists’ willingness to pay tolls thatare priced to minimize congestion. • The region should halt construction ofrail transit lines and other transporta-tion projects that are not cost effectivein relieving congestion.•The legislature should eliminate or strict-ly limit the ability of local governmentsuse tax-increment financing. At the veryleast, such financial support should beprovided to developers only if an area is soblighted that no development would takeplace without initial financial support.

Until these changes are made, cities outside the Portland area should scrutinize Portland’s claims with skepticism. People who want to see their regions remain affordable, uncongested, and livable should look at Portland only as an example of how not to plan.

Notes1. William Yardley, “City That Loves Mass Transit Looks to the Sky for More,” New York Times, January 29, 2007, p. A15, tinyurl.com/3byffn.2. Sayeeda Warsi, “Where the Car Is Not King,” BBC News, August 15, 2006, tinyurl.com/2mmku4.3. Alan Ehrenhalt, “The Great Wall of Portland,”

588. Escaping the Trap: Why the United States Must Leave Iraq by Ted GalenCarpenter (February 14, 2007)

587. Why We Fight: How Public Schools Cause Social Conflict by NealMcCluskey (January 23, 2007)586. Has U.S. Income Inequality Really Increased? by Alan Reynolds (January 8,2007)585. The Cato Education Market Index by Andrew J. Coulson with advisers James Gwartney, Neal McCluskey, John Merrifield, David Salisbury, and Richard Vedder (December 14, 2006) 584. Effective Counterterrorism and the Limited Role of Predictive Data Mining by Jeff Jonas and Jim Harper (December 11, 2006) 583. The Bottom Line on Iran: The Costs and Benefits of Preventive War versus Deterrence by Justin Logan (December 4, 2006)

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